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Author Topic: Bitcoin casino's that don't have cold storage proof  (Read 2275 times)
win win win
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July 30, 2015, 12:28:42 AM
 #41

In that case you really can't do anything. If you plan on playing with a big amount then why would you in the first place go play online at an unlicensed casino , instead of flying out for a few hundred dollars to a live casino which is going to be a much better experience than playing online.

I would rather not get on a plane every time I want to make a large bet! It's a 3 hour drive to the nearest airport for me, then there's all the hassle of checking in, waiting in line, sitting on a plane for hours. I'd also have to convert my money into some kind of fiat before the casino would let me buy chips, then convert it back again if I won. I think I prefer to keep playing online.

As for financial management, sites which don't accept investments might not have their holdings in bitcoin and might actually be converting fiat to bitcoin at the instant a high roller winner requests a cash out as holding onto bitcoin is not a good way for a casino to manage their house bankroll which might have been converted to bitcoin from fiat in the first place.

If your maximum payout is a certain amount of BTC then it is dangerous to keep your bankroll in fiat. The price of Bitcoin can change very quickly and could leave you unable to afford the maximum payout any more.

Suppose I'm offering a maximum payout of 100 BTC, and figure that since my games have a 10% house edge I'm able to support such a payout with a 1000 BTC bankroll. But then I decide to keep the money in USD. So I have $300k put aside as the site's bankroll. Then over the next few weeks the price of Bitcoin shoots up to $1000 each. My $300k is now only worth 300 BTC and the maximum payout now represents 30% of my bankroll. That's horrible bankroll management.

I guess I could regularly adjust the maximum payout such that it's always worth the same number of dollars, so that it always represents the same percentage of my dollar-denominated bankroll. And maybe that's what some of these places are doing: using Bitcoin more like it was Neteller - just a way of moving dollars around, rather than as a currency in its own right.

Great post, These are all great points.

There really is no reason not for casino's not to show us the cold storage proof, Its a added assurance that should be without issue for legitimate casino's.

I know only the casino's adopting it will get my business from now on.
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July 30, 2015, 03:42:47 AM
 #42

In that case you really can't do anything. If you plan on playing with a big amount then why would you in the first place go play online at an unlicensed casino , instead of flying out for a few hundred dollars to a live casino which is going to be a much better experience than playing online.

I would rather not get on a plane every time I want to make a large bet! It's a 3 hour drive to the nearest airport for me, then there's all the hassle of checking in, waiting in line, sitting on a plane for hours. I'd also have to convert my money into some kind of fiat before the casino would let me buy chips, then convert it back again if I won. I think I prefer to keep playing online.

Probably its a thing about personal preference then. I feel better when I gamble at a place like Vegas than in my house. And its actually common that high rollers tend to gamble only for shorter periods of time or only for a matter of days most of the time.

As for financial management, sites which don't accept investments might not have their holdings in bitcoin and might actually be converting fiat to bitcoin at the instant a high roller winner requests a cash out as holding onto bitcoin is not a good way for a casino to manage their house bankroll which might have been converted to bitcoin from fiat in the first place.

If your maximum payout is a certain amount of BTC then it is dangerous to keep your bankroll in fiat. The price of Bitcoin can change very quickly and could leave you unable to afford the maximum payout any more.

Suppose I'm offering a maximum payout of 100 BTC, and figure that since my games have a 10% house edge I'm able to support such a payout with a 1000 BTC bankroll. But then I decide to keep the money in USD. So I have $300k put aside as the site's bankroll. Then over the next few weeks the price of Bitcoin shoots up to $1000 each. My $300k is now only worth 300 BTC and the maximum payout now represents 30% of my bankroll. That's horrible bankroll management.

I guess I could regularly adjust the maximum payout such that it's always worth the same number of dollars, so that it always represents the same percentage of my dollar-denominated bankroll. And maybe that's what some of these places are doing: using Bitcoin more like it was Neteller - just a way of moving dollars around, rather than as a currency in its own right.

Wouldn't it be true and also more dangerous the other way round ? IF a casino had converted 5000 BTC(assuming its a big one) to fiat an year back then it would consider its initial investment to be that value ie 5000*600. And after an year(today) there money would have become half only because of that volatility, so they are actually gambling on the price along with gambling against the gamblers over that one year.
Considering the case of a high roller coming today , the casino would consider his buy in at todays price and will also likely be cashing out at a much similar price instead of waiting for an year and POSSIBLY losing the amount only by holding. They can also gain by holding but its an extra gamble the casinos will be taking.
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July 30, 2015, 01:40:42 PM
 #43

Converting all of your coin to fiat is not a sound thing to do. Of course you must convert some of it to pay expenses, but you should always have a large reserve in case it's needed.

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July 30, 2015, 01:48:17 PM
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Converting all of your coin to fiat is not a sound thing to do. Of course you must convert some of it to pay expenses, but you should always have a large reserve in case it's needed.

If you read again , I didn't say convert your coins to fiat, but I said a site owner could have his bankroll in fiat and could be converting his fiat to bitcoin at the time of a gambler cashing out .
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